BILL COPELAND’S HEALTH LAW INSIGHTS

You may remember in the October 2006 issue of this newsletter, I discussed the Poliner case, a credentialing case out of the United States District Court for the Northern District of Texas¹. The case involved the summary suspension of a cardiologist, board certified in both internal medicine and cardiovascular diseases, who held medical staff privileges, including cauterization lab privileges, at Presbyterian Hospital of Dallas.

With regard to the summary suspension, court found "a complete failure to investigate and to gather all of the facts" before the summary suspension was imposed². The court also found actual malice established as a fact issue, indicating that there was evidence that the chief of cardiology and other staff officers "violated their own bylaws as well as the HCQIA [Health Care Quality Improvement Act] in summarily suspending Dr. Poliner's privilege."³

With these findings, the court held that the protections under the HCQIA were not available. The jury handed down a unanimous verdict, finding that the staff officers and the hospital acted with actual malice and without justification or privilege. The jury award for compensatory and exemplary damages was $366,210,159.30.⁴ Based on the evidence, the jury concluded that:

1. The action to suspend Dr. Poliner's cardiac cauterization lab privileges was not undertaken in the reasonable belief that the action furthered quality health care.⁵
2. The action was not taken in good faith and was taken with malice.⁶
3. There was not adequate notice and hearing procedures afforded Dr. Poliner.⁷
4. There was not a reasonable effort to obtain the facts of the matter⁸

Subsequently, the court determined that the award was excessive and reduced it to $22,542,206.20, $21 million in actual damages and $1,542,106.20 in punitive damages.

While there have been several other cases upholding the protections under the HCQIA,⁹ now comes a second case out of the N.D. Iowa, holding that a hospital is not immune under the Heath Care Quality Improvement Act from a lawsuit brought on behalf of a physician whose privileges were terminated.¹⁰

The physician sued for antitrust activities, violation of due process, breach of contract, reckless infliction of emotional distress, and tortuous interference with existing and future patients. The court dismissed all claims, except the breach of contract claim. The court granted summary judgment on breach of contract claim.¹¹ After a jury trial on the issue of damages, plaintiffs received judgment of $146,025.00.

The defendant hospital filed a motion for judgment as a matter of law or in the alternative for a new trial, arguing it is immune from civil money damages under the health care quality improvement act. Before ruling on this motion, the court reviewed the immunity provisions of the Health Care Quality Improvement Act. The court had earlier ruled that the hospital was not immune, because it was not a professional review body under the HCQIA.¹² In reviewing that holding, the Court reversed itself and found that a professional review body under the HCQIA includes a hospital, and therefore applies to hospitals as well as individual doctors who practice at hospitals.¹³ The court then turned its attention to the steps necessary for immunity under the HCQIA.

The court indicated that there are four separate and distinct steps necessary for immunity to attach to peer review hearings. Specifically, the court said, the professional review action must be taken:

1. in the reasonable belief that the action was in the furtherance of quality healthcare;
2. after a reasonable effort to obtain the facts of the matter;
3. after adequate notice and hearing procedures are afforded the physician or after such other procedures as our fair to the physician. Under the circumstances; and,
4. in the reasonable belief that the action was warranted by the facts known after such reasonable effort to train the facts and after meeting the requirements of paragraph (3). 42 U.S.C. §11112(a).¹⁴

The court went on to quote the statute saying, "A professional review action shall be presumed have met the preceding standards ... unless the presumption is rebutted by a preponderance of the evidence." The court then turned its attention to an evaluation of the four standards.

First looking at whether the action was taken in the furtherance of quality healthcare, the court found that the executive committee initiated this review process after several complaints and incident reports were filed against the plaintiff. Therefore, the plaintiff failed to rebut the presumption that the action was taken in the furtherance of quality healthcare.¹⁵

In looking at the second standard, the court indicated that while there is no doubt that the defendant hospital had some real complaints against the plaintiff, "there was quiet an unreasonable delay, after [plaintiff] was suspended, before [plaintiff] was given copies of these reports. ... Therefore, there was an inappropriate delay because [the hospital] did not allow [plaintiff] access to these incident reports, or any other precise information that would help alert [plaintiff] what the hospital contentions were. These incident reports were one-sided. There was no effort by the hospital to obtain any facts in contrast to these incident reports. [Plaintiff] never had the opportunity to appear at a hearing to examine and cross-examine witnesses and present evidence in response to these reports ... there was no reasonable fact-finding done by the defendant."¹⁶

Turning to the third standard, "after adequate notice and hearing procedures are afforded to the physician involved or after such other procedures as are fair to the physician under the circumstances, "the court found that the hospital failed to follow the requirements as delineated in the HCQIA. Specifically, the court said, there were delays because [the plaintiff physician] was not allowed to bring his attorney into a hearing. However, the court indicated that this does not preclude immunity in and of itself. In order to rebut the presumption, a reasonable juror "would have to find that he has shown by a preponderance of the evidence that the professional review process used by the hospital did not provide him adequate notice and hearing procedures or other procedures fair to him under the circumstances. [The plaintiff] has the burden of overcoming the presumption of immunity by showing that the review process was not reasonable."

The court then reviewed the Szlgarbaker decision¹⁷ and concluded, "contrary to [the hospital] did not comply with a Fair Hearing Plan and the bylaws, therefore, the presumption has been rebutted. Since there was no fair procedures as set out above in Section 11112 (a) (3), immunity is precluded."¹⁸

Turning to the breach of contract claim, the court found of that under Iowa law. the medical staff bylaws constitute a contract between the hospital and the physician. Failure to follow the bylaws constituted a breach of this contract.

The lesson for hospitals from both Blume and Poliner is to follow the bylaws and fair hearing plan very closely. Failure to provide adequate notice and hearing procedures is inexcusable. An adequate investigation before taking a professional review action is mandatory. Failure to do so can result is sanctions that need not happen.

For physicians and their attorneys, make sure to document any deviation from required procedures, whether due to oversight or arrogance, in the record. Failure by the hospital to follow its medical staff bylaws and fair hearing plan is not only grounds for fair hearing appeal; it may be the basis of a cause of action under state or federal law.

¹Poliner v. Texas Healtlz Systems, 3:OO-cv-01007,2006 U.S. Dist. LEXIS 13125 (N.D. Tex. Mar. 27,2006 ).
²Id. at 31.
³Id. at 31.
⁴Id. at 3.
⁵Id. at 7-8.
⁶Id. at 10.
⁷Id. at 9.
⁸Id.
⁹Bakare v. Pinnacle Health Hosps. Inc., No. 1:03-CV-1098 (M.D. Pa. Aug. 24, 2006); Bauman v. Mount Sinai Hosp., No. 05 Civ. 7126(D.C.) (S.D.N.Y. Sept. 29, 2006); McLeay v. Bergan Mercy Heal tlz Sys. Corp., No. 06-246 (U. S. Oct. 3 0, 2006); Reed v. Franklin Parish Hosp. Serv. Dist., No. 04-1481 (W.D. La. Dec. 11, 2006).
¹⁰Estate of Blzlrne v. Marian Healtlz Center, N.D. Iowa, No. 5:03-cv-04117,3/14/07.
¹¹Id. Order at 1-2.
¹²Id. at 6.
¹³Id.
¹⁴Id. at 8.
¹⁵Id. at 9.
¹⁶Id. at 10.
¹⁷Szlgarbaker v. SSM Healtlzcare db/a St. M a y ' s Healtlz Center, 190 F.3d 905 (8th Cir. 1999).
¹⁸Order at 17.

Copyright 2007 William Mack Copeland.

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